Is Washington Finally Serious About Sourcing and Procurement? (Part 1)

It appears that the US federal government is finally taking lessons from the private sector in getting serious about sourcing and procurement – strategic sourcing, to be exact. In a Whitehouse memorandum addressed to the "Heads of Executive Departments and Agencies" dated December 5th, Obama's Deputy Director for Management Jeffrey Zients Obama outlines a detailed approach to "improving acquisition through strategic sourcing." Those interested in reading the memo for themselves can find it here.

What we find most curious about the memorandum are the largely positive steps we see the Obama administration taking to ensure greater strategic sourcing adoption practices going forward (including the creation of a Strategic Sourcing Leadership Council comprised of cross agency and department procurement leaders). But before exploring the charter and focus of this group, it's worth calling out two of the initial demand aggregation programs the federal government has recently implemented.

For example, the memo suggests, "since being put into place in Fiscal Year (FY) 2010, government-wide contracts for office supplies have saved over $140 million by offering lower prices than any single agency could negotiate on its own. Similar vehicles for domestic delivery services saved over $31 million in FY 2011 over what agencies were paying under previous agreements." But the Washington's strategic sourcing path looks more like established category management practices than basic demand aggregation and pooling. We're excited about what we read in the memorandum and will share additional path forward items in the remainder of this series.

- Jason Busch

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